Memphis 'Blue Flu' symbol of pension troubles

MEMPHIS, Tenn. (AP)  Faced with major changes to their health insurance benefits, more than 500 Memphis police officers called in sick Wednesday for the second consecutive day to protest cuts aimed at helping buttress the city's troubled pension program in a showdown that reflects wider struggles in cash-strapped urban centers across the country.

Cuts approved by the City Council have led to protests from city workers, including police and fire staff, who say they cannot afford the changes and feel betrayed by a city they have served and protected. City leaders say public safety has not been compromised due to the so-called "Blue Flu." Still, the state has offered to dispatch Tennessee Highway Patrol troopers if needed.

Memphis is not alone in dealing with consequences of decisions made by city governments facing financial problems such as pension shortfalls and high debt that could lead to bankruptcy. Detroit became the largest municipal bankruptcy in U.S. history last year due to massive debt and a crippling unfunded pension liability.

Meanwhile, police and fire unions in Baltimore are fighting a plan to replace traditional pensions for new officers with a hybrid plan that combines a pension with a 401(k)-like account. In Central Falls, Rhode Island, some public retiree pensions were cut by more than 50 percent when that city went into bankruptcy. Chicago Mayor Rahm Emanuel cited problems with Illinois' teacher pension system when 2,100 school workers  including more than 1,000 teachers  were laid off last year.

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And in Mississippi, government agencies and their employees have been forced to pay out more toward the Public Employees Retirement System, whose funding gap soared to $15 billion.

In Memphis, police spokeswoman Karen Rudolph said 520 officers were out on sick leave Wednesday, down from 557 the day before. Officers began calling in sick en masse on June 30. The police force has about 2,200-members.

About 65 firefighters also were out sick Wednesday. Officials are concerned some are taking action for the same reasons as the police officers, Memphis Fire Department Lt. Wayne Cooke said.

The City Council voted June 17 to essentially remove the city's subsidies from its health care insurance and raise premiums for city employees, both currently working and retired. Savings from the cuts will help increase the city's contribution to its pension fund, which has a $474.2 million unfunded liability, according to a consultant hired by the City Council.

The council is set to vote next week on pension plan changes that put city employees with under 10 years of service into a defined contributions plan similar to 401(k) retirement plans. The police and fire unions have threatened to sue.

The president of the Memphis Police Association has said the union did not sanction the sick calls.

Police consultant Melvin Tucker, who served as police chief in four Southern cities, said organized sick leave actions are possible in right-to-work states such as Tennessee, but they are not common.

"Usually, the situation gets resolved before we get to the point where Memphis is," Tucker said.

Memphis Police Director Toney Armstrong has said officers who abuse the department's sick leave policy will be disciplined. Armstrong has fought with the city council before on budget limitations that have led to empty positions not being filled. His department also has faced criticism over the arrest or conviction of more than 25 officers on misconduct-related charges in the past 2 ½ years.

Mayor A C Wharton Jr. has said public safety has not been compromised. In a statement Tuesday, Wharton said health insurance rates are being increased out of necessity, "but there are coverage options for everyone and we are making provisions for any hardship cases."

Wharton said he understands the officers' disappointment, but he added that, "disappointment is not an excuse to abuse the sick leave policy and refuse to perform the duties they are paid to carry out to ensure public safety."

Community groups have yet to loudly express concern about public safety. But the health insurance cuts to police are likely leading to low morale among officers, who have inadequate counseling and training, says Brad Watkins, executive director of the Mid-South Peace and Justice Center.

"The situation with these cuts and the reaction from these officers, which it's hard to blame them ... creates a recipe for possible negative reactions between people and officers on the streets," Watkins said.

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Associated Press writers Jeff Amy in Jackson, Mississippi, and David Klepper in Albany, New York, contributed to this report.